Incorporating Employment (Amendment) Act 2022
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Award No:2408/2022
  
Company:Suria Strategic Multimedia Sdn Bhd
  
Claimant:  Lim Eong Huat @ Alex Lim 
 
  
Case  
  
  • ​The Claimant was the General Manager of the Company before he was served a letter of termination due to the Company ceasing its business at Kota Kinabalu branch office.
  • The Claimant averred that he was unlawfully terminated and that his retrenchment by the Company was without just cause or excuse.
  • The Company on the other hand claimed that it has been suffering losses for the past 1 year and was no longer able to sustain the operating costs of the branch. Hence, the Company had to reorganize its business, which resulted in the closure of the Company’s Kota Kinabalu branch office. Thus, the Claimant’s service was terminated by the Company.
 
  
Held   
  
  • ​The Court looked into a few issues in this case and was of the view that the Company, by tendering its audited accounts for year 2018 and 2019 had sufficiently tendered its true financial affairs and that the Company had shown that the business was no longer profitable, and the Company has suffered accumulated losses.
  • Further, the Court was of the view that due to Company’s financial losses and based on the operational requirements of the Company, there was a genuine need for the Company to reorganize its business, by carrying out retrenchment exercise which involved all employees at the KK branch. Hence, the retrenchment process was done bona fide and was fair.
  • The Court was also of the view that failure to consult or warn the Claimant of the impending retrenchment does not render the retrenchment mala fide. The Company has no legal obligation to warn the Claimant beforehand of the impending retrenchment and it is not fatal to the Company’s case.
  • The Court took notice of the fact that the Company offered an alternative to termination to the Claimant by transferring the Claimant to Shah Alam. However, it was rejected by the Claimant on the basis that he would be inconvenienced by the transfer. There was no evidence of bad faith/mala fide or victimization put forward by the Claimant on regarding the transfer.
  • On the issues whether the Claimant is entitled for compensation/lay-off benefits, the Court was of the view that the Company was only contractually required to give the Claimant notice of termination as there was no clause on payment of termination and lay-off benefits in the Claimant’s letter of employment..
  • In conclusion, the court was on the view that the Company had established on the balance of probabilities that the retrenchment of the Claimant was done bona fide and the Claimant had failed to produce reasonable evidence to show that the Company had acted mala fide. Hence, the Claimant’s case was dismissed.
 
MEF Consultant-in-Charge: Mr. Bernard John Kanny
 
For more insight on Industrial Relations, please contact any of our IR Consultants at https://www.mef.org.my/ContactUs/consultants.aspx
              
             
            Tags/Keywords
            termination, retrenchment, ceasing business
              
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